[ecis2016.org] With the RERA making it mandatory for developers to offer project warranties, we look at what such warranties cover and the extent to which developers are following these norms
Real estate is one of those sectors, where product warranty remained questionable until the Real Estate (Regulation and Development) Act (RERA) made it mandatory for all projects in 2017. In some of the major property markets, quality construction still remains a value proposition, with consumers willing to pay a premium, in exchange for an assurance of quality. However, home buyers are seldom aware of the structural defects and incompetency that are covered under warranty and the things for which they have to shell out extra money.
You are reading: Developers turn to real estate warranties to woo customers
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The defect liability clause under RERA
According to Clause 14 (3) of the Real Estate Act, a developer is liable to fix any defects that may be brought to his notice by a home buyer, until five years after the possession is granted, without charging any amount for it. Further, the developer will have to fix the problem within 30 days. In case the developer fails to comply, a home buyer will be eligible to get compensation under the Act. Earlier, in their sale agreements, many developers used to keep the period for fixing defects to as low as two years.
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Extended warranties being offered by developers
While this is a bare minimum that a developer should do, some premium real estate builders are going the extra mile to woo home buyers, by focussing on quality at a nominal expense. Recently, Gera Developments introduced a seven-year warranty for home buyers – an extension of two years above the RERA-mandated five-year period. The extended warranty will be available at an additional cost. The five-year warranty covered repairs or re-fixing of fittings or fixtures with manufacturing defects, other defects like leakages, etc. It also included an annual preventive maintenance, which entails a team of carpenters, plumbers and electricians who will check for any repairs and do the needful. All these features are extended to a seven-year warranty, as well. The warranty will be serviced through the Gera World app, thus, making it easy to track complaints efficiently and reduce the turnaround time on warranty and common area maintenance requests.
“Besides being an affirmation of the quality we offer, it is also a reflection of our commitment to delight our customers with innovative offerings. An extended warranty means more peace of mind for the customer and hence, greater consumer confidence. The warranty has kept our focus on product quality sharp and improved our responsiveness to our customers,” points out Rohit Gera, managing director, Gera Developments.
[ecis2016.org] RERA warranty clause: Will it protect home buyers?
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Asset Homes, a Kerala-based developer of luxury villas and flats, with DA2+ rating by CRISIL, too has introduced a 10-year warranty scheme, along with free insurance coverage for 25 years, for its new project in Kochi. It includes warranty for construction material and workmanship. Inspection of the work is done by both, internal and external agencies, at every stage of work to ensure quality of product and the report of the same is forwarded to customers. The builder also guarantees the structural stability of the building and offers an assurance that in case of any issue arising out of not meeting a specified quality, the defective part will be repaired or replaced.
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Real estate warranty: What is covered and what is not
While the real estate authority has tried to ensure that builders fall in line with the rules and regulations, not all builders are following it in its true letter and spirit. There are several loopholes that could affect home buyers in the later stage. For example, the builder warranty does not include any damage caused by vandals, riots, animals, or airplanes, or ‘acts of God’, or home appliances or equipment that were pre-fit in your apartment. It also does not include your housing costs and expenses, if you have to move out while repairs are being made. Home buyers, hence, should read the clauses in the agreement carefully and take note of the exclusions as well.
“It is important to understand that a property deal does not end, with the signing of the agreement. After-sales service begins the moment a customer books the property and it should be continued, till the mutually agreed deadline. Apart from offering good pre-sales and sales experiences, a developer must also endeavour to solve incidents that may occur during and after the property is sold to the buyer. The responsibility of the developer does not end, with providing possession of the apartment. Developers should ideally maintain the project for a few years, with the time duration clearly mentioned in the sale agreement,” says Parth Mehta, managing director, Paradigm Realty.
Source: https://ecis2016.org/.
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Source: https://ecis2016.org
Category: Lifestyle
